Increased risk weight floor for mortgages secured by Norwegian residential real estate

06 Dec 2024 14:30 CET

The Norwegian authorities have decided to increase the minimum requirement for
the average risk weight for mortgages secured by Norwegian residential real
estate, applicable for banks using IRB models, from 20 to 25 percent. The change
will take effect from July 1st 2025, and will initially apply until December
31st 2026.

The new minimum requirement will increase SpareBank 1 Nord-Norge's risk-weighted
assets (RWA), and is expected to reduce the Common Equity Tier 1 capital ratio
by approximately 0.6 percentage points. The Group's reported Common Equity Tier
1 capital ratio (CET1) as of Q3 2024 was 16.6% (taking into account a 50% payout
ratio). The regulatory CET1 minimum requirement for the Group is 14.8 %.

The Ministry of Finance will, in accordance with the regulations, notify the
European Systemic Risk Board (ESRB) of the decision on the risk weight floors,
and will also ask the ESRB to issue a renewed recommendation to other countries'
authorities to make the Norwegian floors applicable to foreign banks' activities
in Norway (reciprocity). In addition, the EFTA Surveillance Authority (ESA) will
be notified, as required by the EEA rules.


This information is subject to the disclosure requirement pursuant to Section
5-12 of the Securities Trading Act.


For further information, please contact:

Bengt Olsen, CFO, email: bengt.olsen@snn.no, phone: +47 975 89 560

Marius Nilsen, CRO, email: marius.nilsen@snn.no, phone: +47 416 20 532

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